کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
5058487 | 1476631 | 2015 | 5 صفحه PDF | دانلود رایگان |
- We examine firms' investments in brand equity in a differential game with product differentiation.
- The feedback equilibrium obtains under open-loop rules.
- Aggregate expenditure takes an inverted-U shape under both Cournot and Bertrand behaviour if differentiation is high.
- Total industry expenditure is higher under Cournot competition.
We revisit the relationship between market power and firms' investment incentives in a noncooperative differential oligopoly game where firms sell differentiated goods and invest in advertising to increase the brand equity of their respective goods. The feedback equilibrium obtains under open-loop rules, and aggregate expenditure on goodwill takes an inverted-U shape under both Cournot and Bertrand behaviour, provided product differentiation is sufficiently high. Total industry expenditure is higher under Cournot competition.
Journal: Economics Letters - Volume 132, July 2015, Pages 34-38